Smith Builders Supply, Inc. v. Rivenbark, 231 N.C. 213 (1949)

Nov. 30, 1949 · Supreme Court of North Carolina

231 N.C. 213

SMITH BUILDERS SUPPLY, INC., v. H. B. RIVENBARK, Receiver of J. F. CASEY, Incompetent, DELVA RAWLS CASEY, Wife of J. F. CASEY, G. DUDLEY HUMPHREY, Trustee, and F. E. LIVINGSTON, Trustee.

(Filed 30 November, 1949.)

Mortgages § 12: Laborers’ and Materialmen’s Liens § 8—

A purchase money deed of trust stands upon tbe same footing as a purchase money mortgage, and its lien is superior to the lien for material which was begun to be furnished the purchaser while he was in possession under a lease with option to purchase, since no lien against the purchaser could attach prior to the lien of the deed of trust, the execution of the deed and the deed of trust being regarded as but one transaction.

Appeal by plaintiff from Hamilton, Special Judge, April Term, 1949, of New Hanover.

Affirmed.

Plaintiff instituted tbis action to recover for materials furnished for tbe erection of a building on lands of defendants Casey, and to enforce lien tberefor wbicb bad been filed under tbe statute (Gr.S. 44-1), 12 September, 1947.

It was agreed tbat plaintiff began furnishing material 2 June, 1947, and tbat balance due tberefor was $1,487. It was also agreed tbat defendants Casey bad entered tbe land in May, 1947, under a lease with option to purchase; tbat Casey bad exercised tbe option 31 July, 1947, and tbat simultaneously with tbe execution and delivery of deed from tbe vendors to them Casey and wife executed deed of trust to H. Dudley Humphrey to secure $4,000, tbe purchase price, loaned by J. O. Hinton. The deed and deed of trust were recorded 31 July, 1947. Subsequently the deed of trust was foreclosed with no excess oyer the debt secured.

It was agreed that only an issue of law was raised, and that the facts set out in the pleadings were true. Thereupon it was adjudged that the deed of trust to Humphrey, trustee, to secure Hinton was a purchase money deed of trust, and superior to the lien of the plaintiff for materials furnished.

Plaintiff appealed.

Stevens, Burgwin & Mintz for plaintiff, appellant.

Kellum & Humphrey for defendants, appellees.

Devin, J.

The court below has ruled correctly upon the admitted facts here presented. The lien of the deed of trust to secure the purchase money loaned, which had been executed and recorded simultaneously with the deed to the vendees, was superior to that of the materialman.

The principle has been uniformly upheld here that a deed and a mortgage to the vendor for the purchase price, executed at the same time, are regarded as one transaction. The title does not rest in the vendee but merely passes through his hands, and during such instantaneous passage no lien against the vendee can attach to the title superior to the right of the holder of the purchase money mortgage. Bunting v. Jones, 78 N.C. 242; Moring v. Dickerson, 85 N.C. 466; Hinton v. Hicks, 156 N.C. 24, 71 S.E. 1086; Humphrey v. Lumber Co., 174 N.C. 514, 93 S.E. 971; Chemical Co. v. Walston, 187 N.C. 817 (825), 123 S.E. 196; Trust Co. v. Brock, 196 N.C. 24, 144 S.E. 365. And this rule is equally applicable where a third party loans the purchase price and takes a deed of trust to a trustee to secure the amount so loaned. Moring v. Dickerson, supra; Chemical Co. v. Walston, supra; Trust Co. v. Brock, supra. The cases cited by appellant may not be held controlling on the facts here presented.

Judgment affirmed.